Home sales in the Vancouver metropolitan area dropped 33% in September compared with the year-ago month, while listings rose 14%. Above, a condominium unit in downtown Vancouver.

VANCOUVER, British Columbia—After a blistering, multiyear run that saw ramshackle bungalows fetch seven-figure sums, one of the hottest real-estate markets in North America seems to be cooling, damped in part by government changes meant to deflate what many policy makers saw as the start of a bubble.

While many U.S. markets are just now showing signs of recovery from a housing crash, Canada has been enjoying a real-estate boom in recent years. Nowhere was that more pronounced than in Vancouver, a market where land long has been in short supply, hemmed in by mountains and the ocean. The city frequently ranks among the most livable in the world and for decades has attracted waves of wealthy Chinese and Asian immigrants.

But now, prices and sales are falling, while properties are staying unsold for longer. Prices in the high-end market, long fueled by overseas buyers, particularly in recent years by well-heeled Chinese, are dropping off sharply.

"This is my slowest month in probably 10 years," said Nancy Schick Skinner, a notary public in the predominantly Chinese suburb of Richmond. "I'm definitely feeling it, and I know that others in our area are feeling it to the same or greater degree."